BHP Billiton's 1H14 Earnings Rise Y/Y - Analyst Blog
Mining giant, BHP Billiton Limited ( BHP ) reported impressive financial results for first-half fiscal 2014, ended Dec 31, 2013. Earnings per American Depositary Share (ADS) came in at $1.52, up 83.0% from 83 cents per ADS a year ago. Higher revenues and cost management were the main reasons behind the hike.
Revenues: Revenues for the first half of fiscal 2014 went up 5.9% year over year to $33.9 billion from $32.1 billion as a result of increased volumes of production.
Production Details: BHP Billiton reported improved year-over-year operating performance. The company witnessed a rise in production of copper, iron ore, metallurgical coal, alumina, aluminium, manganese alloy and nickel. However, production of petroleum products and energy coal declined.
The company's Western Australia Iron Ore (WAIO) operations attained a record production of 108 million tonnes in the reported half year. The high production was supported by an early start to production from Jimblebar mine.
Margin : Underlying earnings before interest and taxes (EBIT) were recorded at $12.4 billion, up 14.9% year over year, as a result of better cost management initiatives undertaken by the company.
Balance Sheet: Cash and cash equivalents, at the end of the period, were recorded at $10.9 billion, up from $5.7 billion in the year ended Jun 30, 2013. Interest-bearing liabilities were $31.7 billion, up from $28.1 billion as on Jun 30, 2013.
Cash Flow: Net operating cash flow increased 65.3% year over year to $11.9 billion. Capital and exploration expenditure totaled $9.1 billion for the first half of fiscal 2014, compared with $12.3 billion in the year-ago comparable period.
In the reported period, the company paid dividends totaling $3.2 billion, compared with $3.1 billion paid in the first half of fiscal 2013. BHP Billiton also approved an interim dividend of 59 cents a share to be paid to the shareholders on Mar 26.
Outlook: As of first-half fiscal 2014-end, BHP had roughly 10 projects in progress, most of which are expected to start production by the end of calendar 2014. The company expects the economy to continue to revive in the coming quarters, mainly in China, thereby, boosting demand and prices of iron ore.
In fiscal 2014, BHP Billiton anticipates capital and exploration expenditure to be roughly $16.1 billion. Free cash flow is expected to increase, which can be used to reduce debt from $27.1 billion to $25.0 billion.
Other Stocks to Consider
With a market capitalization of $181.8 billion, BHP Billiton currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks that are worth a look in the industry include Stillwater Mining Co. ( SWC ), Augusta Resource Corp. ( AZC ) and Rio Tinto plc ( RIO ). While Stillwater Mining sports a Zacks Rank #1 (Strong Buy), Augusta Resource and Rio Tinto hold a Zacks Rank #2 (Buy).
AUGUSTA RSRC CP (AZC): Get Free Report
BHP BILLITN LTD (BHP): Free Stock Analysis Report
RIO TINTO-ADR (RIO): Free Stock Analysis Report
STILLWATER MNG (SWC): Free Stock Analysis Report
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